ETF Education Report: 3EDGE DYNAMIC FIXED INCOME ETF (EDGF)

What this ETF is trying to do

The 3EDGE DYNAMIC FIXED INCOME ETF (EDGF) is an exchange-traded fund listed on the NYSE. Based on its name, it focuses on fixed income, which generally refers to bonds or other debt-related investments.

What the numbers show

When looking at an ETF, it is important to understand the difference between "price return" and "total return."

• Price Return: This measures only the change in the share price. For EDGF, the year-to-date (YTD) price return is approximately -1.42%. The one-year price return is approximately -2.29%. This means the share price has gone down slightly over these periods.

• Total Return: This includes both the share price changes and any cash distributions paid out. The YTD total return is approximately 0.45%, and the one-year total return is approximately 0.87%. Because these numbers are higher than the price returns, it shows that distributions helped improve the overall result.

To visualize this, an estimated price from roughly one year ago was $24.87. The current price is $24.30.

Income and distribution explanation

Some investors look for ETFs that pay out cash, known as distributions. EDGF has a distribution yield of approximately 3.24%. This number describes the cash distributions relative to the ETF's price. Over the last 12 months, there were 4 distributions, which usually happen on a quarterly basis.

It is important to remember that a high distribution yield does not guarantee an investor will earn that same percentage as a total return.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in an ETF decreases. StockValueFinder uses an "erosion-risk score" to measure this risk. EDGF has an erosion score of 94, which is labeled as "Stable / sideways." The erosion severity is rated as "good," and there is no severe erosion-risk flag for this ETF.

Pros

• The total return is positive, even though the share price has declined.

• The erosion-risk score suggests the fund is currently stable or moving sideways rather than losing value rapidly.

Cons

• The share price has seen a decline over the last year and year-to-date.

• The income rating grade is a "C."

Beginner takeaway

When studying EDGF, notice that the share price and the total return are moving in different directions. While the price of a single share has dropped, the total return (which includes cash payments) is positive. This highlights why it is important to look at both price movement and distributions when learning about ETFs.